To tackle tremendous growth in the network traffic, EPON (Ethernet PON Networks) based on Time Division Multiplexing (TDM) is being used. There is a need for a Dynamic Bandwidth Allocation (DBA) algorithm to control the flow of sequence of data among the subscribers. In this paper a new user prioritized Dynamic Bandwidth Allocation (DBA) algorithm is demonstrated. Depending on the prioritized request, bandwidth is allocated to each Optical Network Unit (ONU). The paper addresses Inter and Intra ONU allocation. The bandwidth is allocated fairly among the ONUs. The proposed algorithm is evaluated against various dynamic bandwidth allocation algorithms on different performance characteristics like fairness, bandwidth utilization and packet delay using MATLAB. Findings: The simulated results of the proposed algorithm show improvements in performance characteristics compared to the other algorithms.